The issue of trade facilitation brings
the WTO right to the customs gate. Traders from both developing and developed
countries have long pointed to the vast amount of red tape that still exists in moving
goods across borders. Documentation requirements often lack transparency and are vastly
duplicative in many places, a problem often compounded by a lack of cooperation between
traders and official agencies. Despite advances in information technology, automatic data
submission is still not commonplace.

UNCTAD estimates that
the average customs transaction involves 2030 different parties, 40 documents, 200
data elements (30 of which are repeated at least 30 times) and the re-keying of
6070% of all data at least once. With the lowering of tariffs across the globe, the
cost of complying with customs formalities has been reported to exceed in many instances
the cost of duties to be paid. In the modern business environment of just-in-time
production and delivery, traders need fast and predictable release of goods. An APEC study
estimated that trade facilitation programs would generate gains of about 0.26 percent
of real GDP to APEC, almost double the expected gains from tariff liberalization, and that
the savings in import prices would be between 12% of import prices for developing
countries in the region.

Analysts point out
that the reason why many small and medium size enterprises  who as a whole account
in many economies for up to 60% of GDP creation  are not active players in
international trade, has more to do with red tape rather than tariff barriers. The
administrative barriers for enterprises who do not regularly ship large quantities are
often simply too high to make foreign markets appear attractive.

For developing country
economies, inefficiencies in areas such as customs and transport can be roadblocks to the
integration into the global economy and may severely impair export competitiveness or
inflow of foreign direct investment. Trade facilitation will not only benefit importers
and consumers who face higher prices caused by the red tape in their own import
administration, but exporters as well. Developing country exporters are increasingly
interested in removing administrative barriers in other developing countries, which today
account for 40% of their trade in manufactured goods.

WTO rules comprise a
variety of provisions that aim to enhance transparency and set minimum procedural
standards in aspects of trade administration, such as Articles VIII and X of the
GATT 1994, and the Agreements on Import Licensing, Technical Barriers to Trade, or
SPS. Yet the WTO has no specific provisions on customs and border-crossing procedures,
except in the Agreement on Customs Valuation. Article VIII of the GATT 1994 merely
recognizes the need for minimizing the incidence and complexity of import and export
formalities and related documentation requirements.

Trade facilitation was
added to the WTO agenda at the Singapore Ministerial Conference in 1996, when Ministers
requested the Council for Trade in Goods to undertake a work programme to assess the scope
for WTO rules concerning the simplification of trade procedures.

In the Goods Council,
delegations agree that simplification of trade procedures can result in considerable
savings in time, money and human resources that would benefit each and every economy. Some
delegations have emphasized that automation and the use of information technology would
not only cut down on paperwork but also increase the efficiency of customs
administrations. One member reported that its introduction of an automated customs
clearance system had reduced clearance times for sea cargo from an average of
26.1 hours to 5.6 hours, and for air cargo from 2.3 to 0.7 hours. Another
member reported that allowing importers to fill in customs papers electronically had
reduced the completion time of all information requirements to within
1530 minutes.

A number of
delegations favour a WTO agreement on trade facilitation aimed at reducing administrative
barriers on import and export transactions in order to expedite the passage and release of
goods. They say such an agreement would back up customs reform and modernization efforts
of members and ensure that the same principles are applied all over the world. The EC, US,
Korea and Switzerland have in fact proposed the launching, in Seattle, of negotiations
towards such an agreement.

While agreeing on the
benefits of trade facilitation, a number of other delegations question the need for a
binding WTO agreement in this area subject to dispute-settlement rules. They say that such
an agreement will add further to implementation burdens of developing countries, which
lack resources to modernize customs facilities. Instead, they have called for a
comprehensive technical assistance programme in trade facilitation, and encourage ongoing
work in this area in various WTO bodies  such as the completion of the harmonisation
negotiations in rules of origin  and in other international organizations, such as
the World Customs Organization.